New York City Limits the Use of Credit Checks in Hiring

One of the recurring—and troubling—themes of TalkPoverty posts has been the overwhelming number of misguided policies that kick people while they’re down: from asset limits that tell poor people not to save, to employers’ use of criminal records that make it hard for people to find a job even decades after an infraction.

In a rare moment of good news, New York City has decided to remove one of these barriers by limiting the use of credit checks for employment screening. Last month, the City Council voted overwhelmingly to pass the strongest measure in the country on this issue, joining ten states. This measure, which Mayor DeBlasio is expected to sign on Wednesday, is a major step forward to rein in a practice that does little for employers while filtering out good employees who run into financial trouble.

Nearly half of employers check credit histories for at least some positions, according to the Society for Human Resource Management. This means that before receiving a job offer, the employer has the ability to comb through your financial history to see if you’ve paid your bills on time, and can choose not to offer you a job if you haven’t. Of course, if you’re having trouble paying your bills—because of a job loss, an illness, an irregular work schedule, or other risks that working families face—being turned down for a job isn’t going to make it easier to pay your bills or improve your credit. And so the cycle continues.

If you’re having trouble paying your bills, being turned down for a job isn’t going to make it easier to pay your bills or improve your credit.

Meanwhile, credit reporting itself has its limitations. Roughly one in five credit reports contains errors, according to an analysis by the Federal Trade Commission. And the information in credit reports only reflects part of a family’s financial situation—the part that tends to reflect better on upper-income folks. Mortgage payments count toward a positive credit history—very significantly—but on-time rent payments don’t. And when low-income families pay their regular bills on time—such as rent and utilities—this positive information generally doesn’t go on credit reports, even though negative information such as late payments, nonpayments, and collections ultimately does get reported. So even when families are trying hard to pay bills on time, these bills don’t count in the same way credit cards and loan payments do.

That’s slowly starting to change. There are efforts underway to improve credit reporting to more accurately reflect credit risk and help more deserving borrowers get affordable loans, including a recent pilot where thousands of low-income families living in affordable housing were able to have their rental payments applied to their credit reports and scores. But in the meantime, families are needlessly hurt by a system that misuses financial information to make hiring decisions that hurt those who are already struggling.

To be sure, New York City’s law does have some exceptions for jobs in government, law enforcement, certain finance and tech jobs, and jobs where the employee is in charge of major financial decisions. For these jobs, one can argue that the fears of theft cited when credit screening tools are pitched to companies are more legitimate. (When I worked at the Treasury Department, for example, a credit check was required.) But the City’s new law goes well beyond other states where, for example, handling a certain amount of cash could be considered an exception. And it comes close to two bills introduced in the last Congress: one bill by Senator Elizabeth Warren (D-MA) limiting credit checks to jobs requiring a security clearance, and a bill by Rep. Steve Cohen (D-TN) with added exemptions for some government and banking jobs.

The federal government has been catching on as well. Last fall, the US Department of Labor issued new guidance warning employers that the use of credit reports may be discriminatory. Policies designed to screen for people working in high-level positions shouldn’t apply to most jobs, never mind that even Bernie Madoff probably had a stellar credit history for most of his career.

We should follow New York’s example to keep credit reports where they belong—in the financial marketplace—and not as another barrier to hold people back from jobs and financial security because of past decisions or financial distress.

Temporary Assistance Doesn’t Help Impoverished Married Parents

This Sept. 14, 2011 photo shows Thomas McDaniel, left, Brandi Wells, and her 10-month-old son Logan Tanner Wells on the porch of their apartment in Kingwood, W.Va. Wells, a single mom, is struggling to find a job and care for her 10-month-old son. (AP Photo/Vicki Smith)

Marital poverty is a serious, widespread, but mostly unacknowledged problem in the United States. Just over 9.3 million people in married-parent families live below our extremely low official poverty line. Another 6 million people live between the official poverty threshold and 130 percent of the poverty line, which is the income limit for the Supplemental Nutrition Assistance Program (SNAP) and only about $26,000 for a married couple with one child.

Despite these staggering numbers, there is widespread denial of the reality of marital poverty. Senator Rand Paul (R-KY) has gone so far to claim that being “married with kids versus unmarried with kids is the difference between living in poverty and not.” It appears he is unaware there are more married parents living in poverty in his state than never married parents living in poverty.

We know from a vast body of research that poverty and related financial stressors are risk factors for marital conflict, domestic violence, and divorce. And notable recent research by Laura Tach and Kathryn Edin found that economic factors are a more important predictor of dissolution for married parents than for cohabiting ones.

The Temporary Assistance (TANF) program should be playing a central role in helping married families overcome the kinds of economic hardship and other factors that contribute to the high divorce rate among working class families. Under the Temporary Assistance program, states receive funds to provide means-tested, re-employment assistance and other services to struggling unemployed and underemployed parents with low incomes. One of the four purposes of Temporary Assistance is to “encourage the maintenance of two-parent families.”

Despite this mandate, Temporary Assistance is failing struggling, married families. The extent of TANF’s failure is shown in the chart below. Between 2000 and 2012, the number of married parents living in poverty increased 39 percent, but the already extremely low number of married parents being helped by TANF plummeted by 54 percent. In the majority of states today, fewer than 1000 married parents receive Temporary Assistance. In Louisiana, for example, over 50,000 married parents live in poverty, but only about 50 of them receive Temporary Assistance.

Where Temporary Assistance has failed, other better-designed programs have stepped up. In 2014, the Supplemental Nutrition Assistance Program (SNAP) helped 5.2 million low-income children who lived with both of their married parents, and another 1.2 million children who lived with both of their unmarried parents. Unlike Temporary Assistance, SNAP actually responded to the increase in married-parent unemployment and hardship during the Great Recession. Similarly, early evidence suggests that the Affordable Care Act—including Medicaid expansion and the Premium Tax Credit—has increased health insurance coverage among working-class married families.

How can we fix Temporary Assistance so that it doesn’t effectively exclude millions of struggling, married parents from getting the temporary financial help – as well as employment and other services – that could make the difference between staying together and splitting up?

The first and arguably most important step is to acknowledge the extent of the problem of marital poverty and hardship in the United States, and the destructive impact it has on family life.

Then we need to look at models for reforming Temporary Assistance. Most notably, the original version of the Minnesota Family Investment Program (MFIP) that was evaluated in the mid-1990s reduced divorce among participating disadvantaged, two-parent families. The reductions in divorce were particularly large—70 percent—among black married couples. In addition, both MFIP and Milwaukee’s New Hope Project increased rates of marriage among disadvantaged single mothers.

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These progressive demonstration projects ensured that low-income married- and cohabiting-couple families had an adequate income to support themselves while searching for work or addressing issues that limited their work capacity, including through transitional jobs, re-employment, and other services. Unlike the current Temporary Assistance program, these programs did not utilize unreasonably restrictive participation rates or harshly punitive measures that are mostly aimed at reducing the number of people who receive help; instead, these programs emphasized helping parents obtain and maintain stable employment, while meeting their basic needs.

Unfortunately, the current financial structure of Temporary Assistance and the federal law that governs it makes operating rigorously tested programs like the original MFIP or New Hope all but impossible for states. Fixing this should be at the top of the list of reforms that would help struggling, two-parent families. At the very least, the federal government should establish a national Temporary Assistance demonstration project for married and unmarried two-parent families based on the original MFIP program and New Hope. Of course, some policymakers would prefer to just talk about family values, but even in today’s polarized political environment it should be possible to move forward on a concrete initiative like this one that actually values working-class families by helping them stay together.

Putting Families First: Good Jobs for All

Home health care workers rally for better wages at Olvera Street, Tuesday, April 14, 2015, in Los Angeles. The union representing the workers says that despite performing the crucial task of caring for the elderly and people with disabilities at home, many of those workers in LA County live in poverty. (AP Photo/Nick Ut)

On a December morning nearly 60 years ago, Rosa Parks refused to yield her seat to a white man on a public bus in Montgomery, Alabama. Her decision wasn’t made on a whim; and the ensuing arrest, public outcry, boycott and eventual desegregation of the Montgomery bus system were no coincidence.

Mrs. Parks was trained in civil disobedience; her action was calculated and planned in coordination with local leaders. She was one of hundreds of community members who had come together at a specific moment in history when African Americans across the country, after decades of living under oppressive Jim Crow laws, had reached a tipping point and were thirsty for change.

Today, we find ourselves at another tipping point.

With more than one in three Americans living beneath 200 percent of the poverty line, and more than 17 million people who want full-time employment unable to find it, families across the country are falling into economic crisis.

At the same time, income inequality has steadily increased over the last three decades. Since 1979, wages for the top 1 percent have increased an astounding 138 percent, while wages for the bottom 90 percent have increased just 15 percent over the same period.

These statistics are even grimmer for women and people of color. While unemployment among whites has dropped to just 4.4 percent, the rate for African Americans living in metropolitan areas is an astounding 11.3 percent. Likewise, women are still making just 78 percent of what men make. For black and Hispanic women, these numbers drop to 64 percent and 54 percent, respectively.

And just as occurred in Montgomery, when civil rights leaders like Martin Luther King, Jr. and E.D. Nixon were ready and willing to organize an eager public to participate in the 381-day bus boycott, we too are now surrounded by palpable energy for change.

Just two weeks ago, the Fight for $15 movement held a national day of action—reported to be the largest mobilization of people with low-incomes in history—that furthered the national public debate about low wages and job quality.

Other social movements are making connections to income inequality and jobs as well. In an effort to end employment barriers for people who were formerly incarcerated, criminal justice reform advocates are working to “ban the box” that asks about conviction history on initial employment application forms.

Likewise, the #BlackLivesMatter movement and the immigrant rights movement have begun to link their fights with the fights of low-wage workers, connecting the dots between human and civil rights, and improving the lives and working conditions of people in low-wage jobs.

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With so many families struggling to get by and so much energy for change, the Center for Community Change (CCC) has joined forces with a coalition of national, state and local organizations in 41 states dedicated to building a new economy from the ground up that actually puts American families first.

This morning, CCC, Working Families Organization, The Leadership Conference on Civil and Human Rights, the Center for Popular Democracy, and Jobs With Justice are unveiling a bold new agenda called Putting Families First: Good Jobs for All. This initiative takes the major crises of our time and turns them into opportunities for change. The following are the five focus areas of the campaign:

Decades of stagnant wages, the erosion of labor-market standards, and attacks on unions have left millions of working people without enough to get by. By raising employer standards, setting higher wage floors and restoring workers’ bargaining power, we can ensure that all working Americans have enough to provide for their families.

As mothers and fathers struggle to find quality, affordable childcare, and families are forced to make difficult decisions every day about taking care of elderly or disabled family members, a major investment in the care economy would not only create and improve jobs in childcare and in-home care, but would also support families in need of quality care for loved ones.

Historic disinvestment in communities of color has created concentrated areas of high poverty. By reinvesting in these communities, we can level the playing field and give millions of Americans the opportunity to advance and unleash their talents for the benefit of everyone.

Global climate change may very well be the single greatest challenge facing humanity in this century, but it is also an opportunity to create sustainable jobs that reduce carbon emissions.

Lastly, as millions of Americans struggle to provide for their families, the top 1 percent own 40 percent of the nation’s wealth and they continue to be showered with tax cuts. It’s time we fix this system and invest revenue in an economy that works for all of us.

Less than a week before Martin Luther King, Jr. was assassinated, he spoke at the National Cathedral in Washington, D.C. about the Poor People’s Campaign – an initiative that sought to unite Americans, rich and poor, into a movement to end poverty.

King told the crowd, “This is America’s opportunity to help bridge the gulf between the haves and the have-nots. The question is whether America will do it. There is nothing new about poverty. What is new is that we now have the techniques and the resources to get rid of poverty. The real question is whether we have the will.”

Today, our country is more aware than ever before that our entire economic system is out of balance. We have reached a time in history where the need, the opportunity, and the energy are all here to create an economy that works for our families—now we need the will and the dedication of the American public to make it happen.

To learn more about Putting Families First: Good Jobs for All, and to join our campaign, visit PutFamiliesFirst.org.

Why a “Faithful” Federal Budget Must Address Inequality

In this March 17, 2015, photo, House Budget Committee Chairman Rep. Tom Price, R-Ga. holds-up a synopsis of the House Republican budget proposal as he announces the plan on Capitol Hill in Washington. (AP Photo/Cliff Owen)

It is now almost a cliché when religious leaders state that the federal budget is a test of our nation’s moral values because it reflects our fiscal priorities. We have been saying that individually and collectively for decades.

How are we doing in this measure of morality?

A key moral issue of our times is extreme wealth inequality in the U.S., along with structures that block people from accessing what they need to rise out of poverty, such as a lack of affordable housing or access to healthcare. Like Pope Francis, we at NETWORK believe there is an urgent need to address these twin injustices. The federal budget is one of our country’s most important tools to make that happen.

However, most major budget proposals coming from Capitol Hill do little or nothing to address inequality – or, even worse, they exacerbate it. This is not a partisan view. In fact, powerful and wealthy voices motivated by self-interest have seen their influence greatly increase across party lines in recent years. Their voices drown out those of millions of people with less clout.

In 2011, appalled by years of skewed budget priorities, my organization joined a coalition of 37 faith groups representing Jewish, Muslim and Christian traditions. Our goal was to formulate a new budget plan rooted in our faiths’ teachings about compassion and justice.

Our work resulted in a document we call “Faithful Budget,” which combines bedrock values drawn from our sacred texts and shared experiences with real examples of how our federal budget can address economic injustice. We later updated the document to reflect our new economic reality.

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Our principles for a faithful budget are these:

Economic opportunity for all: The economy is failing to create enough jobs with sustaining wages. We need to invest in education and job creation, along with policies that help families to build assets.

A genuinely progressive tax system: Our tax system now frequently places more of a tax burden – as a percentage of income – on the middle class than it does on the wealthiest among us. We need to prioritize raising sufficient revenue for vital programs over cutting taxes for those with the most wealth.

Prioritizing true human securityover Pentagon spending: Our nation now allocates well over half of its discretionary budget to the Pentagon. We need to cut Pentagon spending while we fully fund healthcare and other sources of individual, family and community wellbeing.

Addressing human needs in the U.S. and around the world: Far too many people live with hunger, unemployment and untreated or avoidable illnesses. We need to fully fund programs like SNAP (food stamps) and Medicaid.

Care for the economic wellbeing of future generations and for all creation: We now do far too little to ensure that future generations will thrive in a sustainable world. We need to fund programs that help children to be better prepared for the future and move us to a healthier environment.

Healthcare access for all: We must build on recent successes in increasing the percentage of people with health insurance. Current efforts to dismantle the Affordable Care Act through defunding and other means should be thwarted, and healthcare access should be expanded to include all.

Recognition of a robust role for government in fostering economic justice: Government must focus on the wellbeing of all, not just those who are rich and powerful. We need more effective budget priorities designed to overcome inequality.

Catholic sisters, and all who serve people at the economic margins, experience on a daily basis how poverty and inequality unravel the social fabric of our entire nation. We can’t afford to let that continue.

On April 28, members of our Faithful Budget community will be on Capitol Hill to brief congressional staff about our vision. We hope and pray that next year’s budget will better reflect our shared values of fairness and compassion. Thousands of our members intend to convince Congress it should act to ensure that happens. This is the right thing to do to pass the moral test of our time.

Poor People Need a Higher Wage, Not a Lesson in Morality

“The idea that poverty is a problem of persons—that it results from personal moral, cultural, or biological inadequacies—has dominated discussions of poverty for well over two hundred years and given us the enduring idea of the undeserving poor.”

—Michael Katz, The Undeserving Poor

In a recent op-ed, New York Times columnist David Brooks called for a “moral revival,” one which requires “holding people responsible” so that we have “social repair.”

To illustrate the need for said revival—which he frames as a reassertion of social norms—Brooks offers what he describes as three “representative figures” of “high school-educated America”: a man whose mother was absent, Dad is in prison, attended seven elementary schools, and “ended up under house arrest”; a girl who was “one of five half-siblings from three relationships,” whose mom lost custody of the kids to an abuser, and whose dad left a woman because another guy had fathered their child; and, finally, a kid who “burned down a lady’s house when he was 13” and says, “I just love beating up somebody and making they nose bleed…and beating them to the ground.”

So goes the latest iteration of the “undeserving poor,” an age-old concept brilliantly excavated by the late historian Michael Katz in his book of the same title. Like the long lineage it stems from, Brooks’ rendition is as “representative” of people with low-incomes as corrupt corporate titans are of small entrepreneurs. Anecdotally, in my years working for Boys and Girls Clubs, reporting as a poverty correspondent for The Nation, and now editing TalkPoverty.org which regularly features posts from people living in poverty—Brooks’ “representative figures” remind me of exactly zero people I have met during this time. I’m not saying that these individuals don’t exist, but they have little to do with the policies or the morality we need to dramatically reduce poverty in America.

Brooks preaches that we should react to these stories with “intense sympathy,” but then ask people who are struggling questions like: “Are you living for short-term pleasure or long-term good? Are you living for yourself or for your children? Do you have the freedom of self-control or are you in bondage to your desires?”

What we really need isn’t a moral revival but a moral revolution.

“Everybody struggles,” he writes. “But we need ideals and standards to guide the way.”

Katz presciently called out those like Brooks when he updated The Undeserving Poor in 2013 not long before his death: “The role of culture in the production and perpetuation of poverty…is enjoying a revival…[This] work remains implicitly animated by the questions, in what ways are poor people different (the answer is not because they lack money) and what should be done about these differences? They are not the most important questions to ask about poverty today.”

What we really need isn’t a moral revival but a moral revolution, one that might begin with Brooks and others looking in the mirror and asking some basic questions:

When it comes to morality and supporting families, I’ll trust my favorite nun over Mr. Brooks any day. Testifying at a congressional hearing on the status of the War on Poverty, Sister Simone Campbell was asked if the real blame for continuing poverty is “the fact we’ve lost our family values? We’ve got single parents and so forth?”

She replied: “I practiced family law for 18 years in Oakland. I found with low-income families that the biggest cause of family break up was economic stressors. So I think the most important piece we could do to support families would be to raise the minimum wage.”

On Saturday, Katz posthumously received a distinguished service award from the Organization of American Historians. It was well deserved, and his voice is still well worth listening to.